mpls welcome to "on the money." i'm becky quick. is good news finally good news? the road to ruin. the largest city in u.s. history declares bankruptcy. how to protect against credit card fraud and identity theft this holiday season. tips before you shop till to drop. "on the money" starts right now. >> this is america's number one financial news program. "on the money." now becky quick. here is a look at what's making news as we head into a new week. some surprising strength in america's economy. the unemployment rate fell to a five-year low to 7%.

data for the previous months were revised higher. all of that sent stocks up early after a five-day losing streak for the dow and the s&p 500. the news sent interest rates on the tenure treasury higher. the second reading of the gross domestic product as well. the gdp growing at a whooping 3.6%. new home sales surged in october. up 25%. that was the sharpest increase in over three decades. analysts expect sharp reviegss downward. auto sales were high as well. rising at the best pace in six month pps gm rose 13%. chrysler 16% and toyota 10%. all of those numbers were better than expected. due to the strong jobs report an the gdp numbers means

we picked up enough speed and what does it mean for the fed tapering its buying program. joining us is greg mankiw. he's an economic's professor at harvard. it's great to see you today. >> it's nice to be with you. >> what do you think? we with seeing this long awaited recovery? >> we've gotten good news. there's no question this jobs report is a step in the right direction. we don't want to overstate hold up good it is. it's good compared to the meager recovery we've seen over the past few years. if you look at other deep recessions this is stale a fairly tepid recovery. >> do you think we're finally hitting that point where we can pull out of it? maybe getting the stronger growth or do you need to see a little more data? >> i'd like to see a little more data. i think the signs have been looking up. i think the fed will have to wait and see the coming data

looks like before they make a final decision about tapering. >> that final decision about tapering, you don't think that will happen in december. the market does think it's co coming in the first quarter. is is that what you think too? >> the new lead eer janet yelle is on the dubbish side of things. she's got a herd of cats she's got to deal with and try to figure out how to come to a c e cocome compromise. >> we don't see inflation yet so do we have more time before we need to do anything? >> janet yellen is looking at a economy that's recovered a little bit. there's no sign of inflation. on the other hand what they're doing right now is extraordinary. i don't think they really felt comfortable doing these extraordinary things the and

they'd like to stop doing them as soon as they can. >> we know in washington the two sides of the aisle have not had many things that they have had in common. it looks like we could get some sort of a small budget deal. if you have murray on one side and paul ryan, the congressman. if the two of them can come up with something, even if it's a small deal, what would that do to economic growth in the first half of next year? >> certainty is never good for the economy. uncertainty driven by policy. it's certainly not good for the economy. i feel quite good that murray and ryan are on this. two serious legislatures. they want to come to a deal. it's not going to be a grand bargain. we're not going to see the fundamental restructuring that we need to see. that can will be kicked down the road as it has been. even a small deal that reduces some of the uncertainty.

>> this week the president spoke about raising minimum wage. do you think it should be rais d ed? >> no, i don't. inequality is not recent. going back to 1970s we've seen inequality start rising. the question is how to deal with it. the minimum wage is a pretty imperfect instrument for dealing with it. it tells employers that hiring unskilled workers is more costly. i think it's a pretty imperfect instrument for dealing with rising inequality. >> we want to thank you for joining us. that also brings us back to the markets. joining us right now is michael farr. thanks for being here today. >> thank you. great to be here. >> is good news finally good news for the market? is that what we're seeing? >> maybe. it doesn't feel that way.

good news helped us on friday. markets were stronger. that was after five consistent down someddays. i think good news in the economy means that the fed may start to taper a little bit sooner. this is a market that's been supported by fed money and therefore i think we're going to have kind of a bumpy transition into tapering. once it starts to taper, i think there's enough cash on the sidelines that we could continue to fuel a positive market for a while. i wouldn't say good news is good news quite yet, but stay tuned. we've got a transition to get through. >> it does seem like the bond market has been driving things. if you want to know where stocks are headed just look at the yield on the tenure. you can figure stocks are headed in the opposition direction. we've been seeing steadily climb over the three or four months. maybe that's a good thing. maybe it means the market will recognize that the fed will not always be around.

>> i think so. that's kind of paradox we're facing. when we see better economic data and it means that the fed may go away, it also has resulted in higher interest rates and then the markets says higher interest rates mean the housing market may slow. construction jobs. the big box lowe's and home depot may slow. as the rates go higher, that will be a head wind to the economy. >> for the end of the year do you have any tips for people as they look at their portfolios? >> you have to look at reallocating according to your discipline. you've had a great year for stocks, it feels horrible to sell stocks and move money into bonds. you need to do it. you need to stick be your discipline. if you're worried about the bond market maybe keep the maturities short. stick with your discipline.

it will keep you out of trouble for the long term. >> great talking to you. >> thanks for having me. up next, we're show sh"on t money." inside how to entrepreneurial thinking could help our most embattled city. later, we don't want your giving list to include scam artists. we'll have tips on how to protect your identity while shopping for loved ones. take a look at how the stock market ended the week as we go to break.

detroit became the largest u.s. city to declare bankruptcy this week. the motor city, the former icon of america will now restructure more than $18 billion in death. joining us is dennis archer.

he's mayor of detroit, michigan. we want to thank you for being here today. >> thank you very much for having me. >> is this a good thing for detroit? >> absolutely. when you consider that we're going to run out of cash, have no money to pay any bills by tend of this month or no later than january of 2014. there really was no choice. >> it will mean likely that those who have been holding onto some of these promises made to them will be left out in the cold. >> let me make this observation, from everything i know about the judge who have shared with me high regard of being very fair and thorough and very circumspect. when it's all said and done there's going to be high regard

and respect shown to pensioners, creditors and bondholders. >> this is something the rest of the nation has been looking to. >> as judge rhoade said in his opinion, that the pensioners have a contractual right. what's been a discussion for long standing sense of issues come up. it's whether or not how they will be treated because in the state constitution of michigan they are protected, but in this instance federal law trumps our state constitution. >> i wonder if you have any regrets about things you did when you were mayor? >> i don't. >> i'm thinking specifically of the deal you had with governor engler where the state was supposed to be paying over $330

million a year to the city. >> $3.9 million and i regret it was not lived up to. as the governor indicated in an article when asked about it, he said he was faced with an epic financial crisis and he had to make cuts. they did not follow through on their commitment. i'm hopeful since the state of michigan is now flush that at some point in time when this thing is over that the state will perhaps step up and make up for it. >> part of the problem is just looking at the population in detroit. it's been cut by over half. i think there's a population about 700,000 people living in the city. is there anything done -- >> more than half. >> go ahead. >> we had about 1.82 million people in 1953. today we have over 700,000. when you lose that population

there's two principal sources of revenue that comes into the city. one is income tax for those that live in city. those that live outside and work in the city and then property tax. we got hit with a per ferkt storm when you consider the mortgage debacle and we got hit with the manufacturing layoffs and the like. people said oh, my god. it cost over $100 to fill up the suvs. automobile manufacturers started laying people off. one out of every si jobs were related to the automobile industry before this happened. people were work overtime and the like. when the crisis hit and people couldn't work overtime and a lot of people got laid off pup. >> it's a numbers game. do you think stroit detroit will be fixed a year from now, five years from now, a decade from

now? >> absolutely. you can't come downtown today and find a lost apartment or condo that you can lease, buy or rent. you cannot go to a parking garage in downtown and lease a space for your automobile. it's full. people are investing. businesses are coming back, and city will be coming back. when the emergency financial manager is through. he's made it clear he wants to create an environment where the city of detroit will have a revenue flow that will allow them to hire police and make the repairs necessary, keep the lights on and bring the quality of life where it should be. if you've got some money you want to invest, come to the city of detroit right now today. >> thank you. it's great talking to you. we appreciate it. >> thank you so much. can the problems in urban america spark a fuse to engage leaders to solve them.

we're taking a look at fuse corp. mostly work at cabinet level positions with mayors and public leaders. jennifer anastasoff is the founder and lisa gans is a recent fellow. thank you for being here. >> thank you. >> why don't you tell us why you founded this and what you think it can do with the big problems we're facing like in detroit? >> government is rarely rewarded for innovation. businesses you are rewarded. fuse corps is bringing them in to invest. >> can you reward them? >> absolutely not. they don't look for it. there's a lot of people out there, many of them are probably watching now, who have a latent desire. they want to get out there and make a difference. they want to make a social

change. they're willing to take a year, 12 months to be a senior advisor. we have a former executive for nokia. >> lisa you were a former corporate lawyer who worked in washington, d.c. with the neighborhood alliance. what are you doing now and what are the similarities and the differences? >> i did start as a litigate tor in new york and got into international development. with fuse corpsi spent a year in the dc promise neighborhood. i designed continuum of services. after a year of -- it was a start-up environment. bringing in entrepreneurial talent. when i started we had three employees with no place to sit. now have a full building.

$28 million in funding. over 20 in staff. it was quite a year and quite a story. now i'm working at city first enterprises. we're a cdfi. a community development financial institution. we focus on market other yentsed solutions. >> what got you to make the switch? what pushed you? what motivated you if you started out on the corporate side? >> i guess i had two switches. i was in new york on 9/11. i watched the towers come down and basically said this isn't what i want to be doing when a plane flies through my window. i felt like i wanted to give something back. i switched to international and human rights. when i made the decision to come back to the united states, peace corps was the way to do that. >> thank you both for coming in. >> thank you. we're "on the money." charging your credit card or

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an identity is stolen every three seconds in the united states and a frenzy of the holiday season can put you at risk for identity theft. what can you do to keep you safe. benjamin lawsky joins us right

now. thanks for joining us. >> thank you. >> how big of a problem is this? >> huge. it's a problem since so many shop online. identity theft is happening all the time and it's something we have to been fighting all the time especially during the holiday season. it's real problem. people need to be careful with their personal information, credit cards. >> are there new scams we don't know about or is this the same thing we've been hearing about for a long time where people steal your information and credit cards? >> there's always new scams emerging. they're looking for your personal information, hacking is a huge problem now. they're looking for this data. it's a treasure-trove once they get your personal information and they can engage in all kind of difference frauds. it's trying to get a credit card or a credit card number and buying things and selling them. >> i got my credit card stolen about three weeks ago. what could i be doing to protect myself a little more? >> i think often you need to be watching carefully when you use your credit card. that's a very valuable thing.

people don't think of it that way. it's just a card. we use it all the time. if someone takes your credit card they'll run a transaction and they disappear behind the counter for a few minutes. there's devices called skimmers. they swipe your card and it's in a computer ship they had. >> i wouldn't know that even if i saw it? >> no. you'd have to keep a close eye. if someone takes your credit card and disappears behind a desk for a few minutes that's a problem. you can never fully protect yourself. you have to be vigilant. if you see charges your honor card that shouldn't be there, you need to react very quickly. immediately call your card company, shut it down, get a new card. it's inconvenient but you have to do it. you can call the credit reporting agencies and have them put a freeze on all of your accounts so no one can apply for new credit in your name for 90 days. that's often very helpful. once they get your data, the

scammers will try to keep app applying for new cards. >> i've seen services like lifelock that officers this protection of things and let you know if something happens. is that valuable? >> i don't want to opine on what people should do and not do. there's a lot of things you can do that doesn't cost you money. a lot of this is being individu individual lant and realize it's important. >> thank you for coming up. >> thank you. up next, a news that will have an impact "on the money." a window on another record art sell when we come right back.

for more on our show and our guests you can go to our website, and you can follow us on twitter @onthemoney. we'll be getting earnings from toll brothers and costco. on tuesday u.s. regulators will be voting to approve the final version of the rule which prohibits banks from making speculative trades with their own funds. thursday, retail sales data is due and friday is ben bernanke's 60th birthday. happy birthday. finally, another market record. we're talking about the art market. the edward hopper painting is

sold this week for $40.5 million. that's a new record for the artist and nearly twice its estimate. experts say that the depression narrative of a burst economic bubble particularly resonated with today's collectors. that's the show for today. thanks for joining me. next week how a start-up is shaking up be tv industry and tempting cable subscribers to cut the cord. each week we'r good morning nelly! woah.

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good morning. menacing and hazardous. winter weather alerts in a whopping 31 states this morning. some of the country's biggest cities, washington, new york, boston, bracing for sleet, freezing rain anng rain and sno. prayer, reflection and celebration. ♪ >> a week of memorial events under way in south africa this morning to say good-bye to nelson mande underway inla south africa to s good bye to nelson mandela. lester is live with the latest. and it is off. prince harry's race to the south pole cancelled. that doesn't mean the royal is giving up on his mission to